[Valuable Intellectual Property] "No More Fake Goods from China" Guardians of K-Brands

⑬'IPSpace' Catching Chinese Counterfeits
Cooperating with Chinese Authorities to Crack Down on Illegal Businesses
Seized Korean Fake Beauty Products Worth 550 Million Won
"Deleted 20,000 Unauthorized KF Mask Advertisement Links"

There is a Korean company based locally in China that is on the front lines of the war against counterfeit goods. It is IPSPACE, established in 2021. They respond to counterfeit issues not only on behalf of government agencies such as KOTRA and the Korean Intellectual Property Office but also private companies. Last year, they uncovered a Chinese mask company that brazenly sold masks bearing the KF94 certification mark and a company that supplied hospitals with Botox (botulinum toxin) and fillers falsely labeled as Korean products. Moon Byung-hoon, CEO of IPSPACE, who studied intellectual property law at Tsinghua University in China, joined Amorepacific in 2011 and gained 10 years of experience in the intellectual property team before starting his own business. We met with CEO Moon to hear stories from the counterfeit crackdown field and the importance of intellectual property.

- How long has it been since your last visit to Korea?

▲ It’s been three years. During that time, travel was restricted due to COVID-19. During the pandemic, even the public security police were reluctant to respond to field operations, making counterfeit crackdowns difficult. Cooperation from the public security police, who have investigative authority, is necessary to conduct phone wiretaps and identify criminal activities and to raid counterfeit manufacturing factories. If the damage from counterfeit goods exceeds roughly 50,000 yuan, it is considered a crime and the public security police initiate an investigation. If it is below that amount, the Market Supervision Administration imposes administrative measures such as fines.

- How did you conduct the crackdown on counterfeit beauty and medical products?

▲ The Korean Embassy in China became aware of the case and we started the project in June last year. We heard that there was a company supplying hospitals and skin care clinics with Botox and fillers falsely labeled as well-known Korean medical beauty brand products. Since these products are injected into the body, it was seen as a serious incident that could lead to casualties, similar to the fake baby formula scandal. We visited over 20 cities in China, inspecting 36 wholesale markets as well as 166 establishments including skin care shops, hospitals, and illegal clinics to assess the counterfeit situation. Online, we posed as customers to obtain samples. Since illegal transactions occur through social media platforms like WeChat in China, we also received help from the public security police. When officials raided the sites and seized goods, they confiscated about 3,000 counterfeit items worth approximately 550 million KRW.

Crackdown on counterfeit Chinese KF94 masks [Provided by iPspace]

- You also caught a group selling masks with the KF94 mark, right?

▲ In China, the KF94 certification mark is essentially a symbol of a high-quality Korean mask. Two Chinese companies, thinking that attaching the KF94 mark would boost sales, manufactured and sold unlicensed masks without much concern. Of course, these masks had not undergone fine dust filtration testing. We purchased samples online to identify the company locations, and together with Market Supervision Administration staff, seized goods from factories and warehouses. The companies were then subjected to administrative penalties such as fines. Afterwards, we collaborated with online platforms like Taobao to remove 20,000 advertisement links for Chinese masks bearing the KF94 mark. It felt rewarding to contribute to enhancing trust in K-brands.

- How should small and medium-sized enterprises respond to counterfeit goods?

▲ Actually, the mere existence of counterfeit goods is not a big problem. If a product is not popular, there won’t be counterfeits. You should accept it as a sign that “our product is selling well and popular.” The key is how to effectively resolve the issue. Government agencies like KOTRA and the Korean Intellectual Property Protection Agency under the Korean Intellectual Property Office provide financial support and consulting, and there are several companies in China specializing in brand protection.

- What should companies considering entering the Chinese market be aware of?

▲ When I worked at Amorepacific, I visited a Chinese clothing company specializing in trademark preemption. This company had its own brand but was also preemptively registering trademarks of fashion brands worldwide. Four employees spent their days reading 20 to 30 fashion magazines daily, eagerly searching for trademarks to preempt. They aimed to register trademarks not yet filed in China. Since the trademark application fee is about 50,000 KRW, they file dozens of applications daily. If the original company later realizes their trademark has been preempted, they demand millions to hundreds of millions of KRW per case to settle. If you are considering the Chinese market, you should pay attention to trademark registration from the early stages of your startup, just like managing your health and buying insurance before getting sick.

- Could you share your management philosophy and business know-how?

▲ Although we manage and protect corporate intellectual property and safeguard brand value, the most important thing is to help our clients’ businesses. Most company executives focus on “how to increase performance,” so intellectual property-related tasks are often neglected. Therefore, I emphasize the economic value of intellectual property protection to our clients. Our goal is to demonstrate how protecting intellectual property, such as cracking down on counterfeits, can lead to tangible sales growth for companies.

Moon Byung-hoon, CEO of i-SPACE

This content was produced with the assistance of AI translation services.